This year, like so many years previously, there are over a dozen bills before the Hawaii Legislature whose champions promise will end non-compliant vacation rentals.
Against this disheartening backdrop, a Feb. 2 letter to the editor in the Honolulu Star-Advertiser identified the problem (“Vacation Opens in a new tab rental fight about hotel Opens in a new tabprofits Opens in a new tab”).
Hoteliers criticize vacation-rental operators for not paying their share of taxes, yet opposed efforts by Airbnb to collect taxes on their behalf, observed letter writer Angela Seng. Of this hotelier behavior, she said, “It’s another indication that this fight against vacation rentals is not about helping our communities, but rather desperate attempts to protect their bottom line.”
Ms. Seng is spot on.
A key cause of Hawaii’s never-ending effort to address so-called “illegal” vacation rentals is that those often driving supposed cure-all legislation are the same ones who would benefit if they could get legislation passed that awarded them an accommodation monopoly.
First, it was rental agencies who touted bills that would have forced every operator of a vacation rental to hand over management and control of it to a rental agency. Hoteliers responded by driving legislation so draconian they would have ended all vacation rentals.
While battles for a state-sanctioned accommodation monopoly might make for good drama, they get in the way of facts, reliable data and balance. And it’s why, in 2019, we’re exactly where we were years ago. Non-compliant operators continue to operate with impunity.
On Jan. 29, the Star-Advertiser covered a study by Kloninger & Sims Consulting. The study, done for the Hawaii Tourism Authority (HTA), found that hotels provide 54 percent of state accommodation, and vacation rentals now provide more than 16 percent.
The gem in the report was found at page 65, which concluded that “[M]ost of the Individually Advertised Vacation Rental Units were located within the state’s resort areas. It is likely that most of these units have historically been available as visitor units and as such are accounted for in the Visitor Plant Inventory survey.”
On Feb. 4, the newspaper quoted the HTA’s commitment to “support legislative efforts to eliminate illegal vacation rentals.” “Illegal” vacation rentals? When their own report declares that most of Hawaii’s vacation rentals are operating where they’re legal to operate? And with a Hawaii Department of Taxation more than capable at ensuring tax compliance? Think back to Seng’s assertion.
Hoteliers are well represented in the HTA’s governor-appointed board and executive. But with 16 percent of accommodations in the state now provided by vacation rentals, it’s time owners were represented on that board — not rental agencies who have made clear their desire for a monopoly — but owners. Owners who operate compliant vacation rentals and want to see compliance by all.
This kind of modernization by the HTA will bring balance to it, and help temper the self-interest that’s marked its legislative input in recent years, an approach that has stymied legislative efforts to enhance compliance and enforcement by producing bills that are unworkable, violate state or federal law, or are unconstitutional.
In freeing state and county legislators from the distraction caused by this unchecked self-interest, they’ll be able to better target and fund efforts to clarify and enforce requirements for non-compliant operators. They’ll be in a stronger position to pass workable, effective legislation, and to clarify zoning and its enforcement to reduce non-compliant vacation rentals.
It’s time to stop indulging the year-after-year drive by those seeking state-legislated accommodation monopolies.
If the governor can bring balance to the HTA board, and state and county legislators balance the influence of such special interests in shaping their legislative efforts, we may actually see some durable resolution on non-compliant vacation rentals. That’s an outcome that would benefit Hawaii residents, operators of compliant vacation rentals — and, yes, even hoteliers.
Adam Leamy operates a zoning- and tax-compliant vacation rental on Maui.
